With falling interest rates and rising share prices, it's becoming increasingly difficult to know where to allocate your money for the best returns possible, for both today and tomorrow. With dividend stocks, it's important to consider the durability of the payouts that the companies are yielding. Remember that each dividend paid out weakens a company, so ensuring that the stock's foundations are strong is more important than ever.
Here are three quality dividend-paying stocks that I think would serve well in any retirement portfolio.
Australia and New Zealand Banking Group (ASX: ANZ)
ANZ bank needs no introduction, but I believe that ANZ's business model is among one of the better of the 'Big Four' ASX banks. With a more 'balanced' balance sheet than say Westpac Banking Corp (ASX: WBC), ANZ is spread more evenly between retail banking (mortgages and credit cards) and business banking. ANZ also has a share repurchase plan, which adds to the earnings per share very nicely. ANZ is currently yielding 8.11% grossed-up.
BWP Trust (ASX: BWP)
BWP is a REIT (or Real Estate Investment Trust) that primarily owns industrial property like warehouses that it rents to clients. Most of BWP's warehouses are leased to Bunnings, owned by Wesfarmers Ltd (ASX: WES), so you can be assured of the 'quality' of BWP's tenants. Although (being a REIT) BWP's dividends are not franked, it is still yielding a healthy 4.84% on current prices. Quality real estate can be a good way to diversify your income portfolio and BWP is a good place to start, in my opinion.
Telstra Corporation Ltd (ASX: TLS)
Telstra has thoroughly impressed the market this year so far, with Telstra shares up almost 40% YTD alone (not including dividends). There have been big changes at Telstra, with CEO Andy Penn implementing a cost-cutting strategy known as T22. I am confident of Telstra's ability to maintain its commanding lead in the Australian telco space over the next decade and beyond. Therefore, I am also confident that its current yield of 3.89% (fully franked) is worthy of inclusion in a dividend portfolio.
Foolish Takeaway
I think any of these quality companies would be a good pick for your retirement portfolio (you may own some already). All have qualities that should enable a healthy stream of dividends (and some franking credits) for the foreseeable future.
